The Financial Times reports that US regulators are calling for closer scrutiny of hedge funds in the wake of the bond turmoil

April 15 (Reuters) – Gary Gensler, the head of the US Securities and Exchange Commission (SEC), said hedge funds and other parts of the shadow banking system needed closer scrutiny after last month’s US Treasury bond upheaval, according to the Financial Times reported on Saturday.

Gensler told the paper that reducing risk from speculative funds and non-bank financial institutions is “more important than ever.”

“We just had a clearer three-day move in Treasury yields in mid-March than we have in 35 years,” the Financial Times quoted Gensler as saying, noting last month’s volatility in Treasury bonds following the rapid collapse of Silicon Valley Bank and the Downfall of the Signature Bank.

“If you have that, then as a capital markets regulator, it’s appropriate to talk to people and see if that risk… is spreading.”

Last month, the SEC proposed new rules for better oversight of private equity and hedge funds that would require reporting events indicating “significant stress” to the SEC within one business day.

Gensler said he had previously determined that hedge funds pose a risk to financial stability and that the SEC is in direct contact with market participants and receives quarterly reports from hedge funds, the report added.

Reporting from Gokul Pisharody in Bengaluru; Edited by Alex Richardson

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